London Forex Report: Polls Deliver, Euro Gaps Higher

London Forex Report: Polls Deliver, Euro Gaps Higher

London Forex Report: The leading headlines this morning concerns the first round of voting in the French Presidential election, with Emmanuel Macron securing 23.88% of the votes and Marine Le Pen at 21.3%. They will go head-to-head in a 7 May runoff. With pre-election surveys having been proved accurate, this gives credence to other pre-election surveys that have consistently suggested that Macron would beat Le Pen should they square off in the second round.

USD The Markit US preliminary PMI manufacturing index declined to 52.8 for April from 53.3 in March. This was below expectations of an increase to 53.5 and the lowest reading for seven months. The services-sector index declined to 52.5 from 52.8, also at a seven month low and contrary to expectations of a small increase for the month. The composite output index declined to 52.7 from 53.0, also the weakest reading for seven months.

EUR The flash Eurozone Markit PMI manufacturing index for April strengthened to 56.8 from the March reading of 56.2. This was above expectations of a figure of 56.0 and the strongest reading for six years. The services-sector index also strengthened to a six-year high of 56.2, although with only a limited advance from the March reading of 56.0 and marginally above consensus expectations. The composite output index strengthened to 56.7 from 56.4 previously, also the strongest reading for six years.

GBP Headline UK retail sales volumes declined 1.8% in March compared with expectations of a 0.2% drop for the month, although the February increase was revised up 1.7% from 1.4%. Annual growth slowed to 1.7% from 3.7% previously and an expected gain of 3.4%. On a three month basis, overall sales volumes declined 1.4% from the previous three-month period with weakness in three of the last four releases. This was the first quarterly decline since the fourth quarter of 2013. Excluding fuel sales, there was a 1.5% decline on the month with the annual increase cut to 2.6% from 4.1%

JPY Japan has a string of indicators from retail sales to industrial production, housing starts and CPI on the deck. The Bank of Japan (BoJ) will announce the outcome of its latest Board meeting and release its update Outlook Report on Thursday. No changes are expected.

EURUSD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: 1-3 Day View – 1.0860 achieved, as 1.0780 supports corrections expect a grind higher to test 1.0982 as the next upside objective. Only below 1.0680 resets focus on downside objectives

1-3 Week View – While 1.10 contains corrective attempts higher focus remains on a retest of 1.03 ahead of 1.0118 extension objective form 2015/17 consolidation. Only over 1.14 sets upside focus on 1.1876
Retail Sentiment: Bearish
Trading Take-away: Long

GBPUSD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: 1-3 Day View – Testing 1.2880 equidistant swing resistance as 1.2770/50 supports bulls will focus on a test of psychological 1.30 magnet , only below 1.2560 concerns near term bullish bias.

1-3 Week View – While below 1.2880 bears set sites on 1.10 as the broader downside objective, a weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of symmetry swing objective sited at 1.3238
Retail Sentiment: Bearish
Trading Take-away: Long

USDJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: 1-3 Day View – Near term resistance sited at 109.58 removed, price testing 110.50 as 1.0940 supports potential to test 111.75 pivot, only over 112 stems selling pressure

1-3 Week View – as 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Bullish
Trading Take-away: Short

EURJPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: 1-3 Day View – Near term support sited at 117.80 as price prepares to test pivotal 120.50 a close over this level arrests near term selling pressure.

1-3 Week View – The weekly close below symmetry swing support sited at 117.69 sets a bearish tone with 113.70 the medium term downside objective , a weekly close above 118.50 would arrest the immediate downside risk, resetting focus on pivotal 124.40
Retail Sentiment: Bearish
Trading Take-away: Long

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